Evergrande 'sell the factory' to save itself! More than a dozen paint factories may be affected!

On the evening of the 10th, Evergrande Group issued an announcement stating that the company is contacting several potential independent third-party investors to discuss the sale of some of the company’s assets, including but not limited to the sale of the company’s listed subsidiary China Evergrande New Energy Automobile Group Co., Ltd. and Hengda New Energy Automobile Group Co., Ltd. Part of the equity of Da Property Group Co., Ltd.

At the same time, Evergrande Automobile and Evergrande Property also made an announcement on this, and said that as of the announcement date, no specific plan or formal agreement has been determined or entered into.

Real estate analysts said that the sale of major properties revealed a signal of greater financial pressure on Evergrande Group. According to informed sources, Evergrande is indeed in contact with a number of companies, including Vanke, Poly and other well-known real estate companies, and said that currently Evergrande can seek more opportunities for self-help only by casting the net.

Selling assets to "self-rescue"

According to industry insiders, Evergrande’s pre-loss 4.8 billion is just one of the straws that overwhelms the “camel”. Since June this year, the negative public sentiment of Evergrande Group has been unsettled one after another, and the continuous bad news has made the situation of Evergrande Group, which is already in the real estate winter, worse. However, it still has not given up its "viability", and has successively adopted methods such as disposing of multiple assets to actively "self-rescue".

On June 20, China Evergrande transferred 739 million shares of Hengteng Network, corresponding to a total price of 4.433 billion Hong Kong dollars;

On June 21, China Evergrande transferred 29.9% of the shares in Jiakai City, with a total price of approximately 2.762 billion yuan;

On August 1, China Evergrande sold its equity in Hengteng Network again for a total price of HK$3.25 billion, and its shareholding ratio fell to 26.55%;

On August 2, Evergrande withdrew from Shenzhen High-tech Investment's shareholders and transferred 7.08% of its shares to Vanke's subsidiaries.

The announcement mentioned in this announcement "including but not limited to the sale of part of the equity of the company's listed subsidiary..." may also indicate that more equity and business will be sold in the future.

"Break arm to survive" or trigger the butterfly effect, many paint factories "lay the gun"

The sale of property and auto assets this time reveals the signal that Evergrande Group’s asset sales are gradually shifting from non-core assets to core assets. It also means that Evergrande’s assets are being reduced and contracted, facing the crisis and risks of a broken capital chain. "Survival with broken arms" has become the best choice, which will also bring a butterfly effect to its upstream raw materials.

According to incomplete statistics from the Coatings Purchasing Network, Carpoly, Karen, Zhanchen New Materials, China Resources Paint, Bardez, Keshun, Oriental Yuhong, Asia Paint, Fuster, Meitushi, Nippon Paint Other coating companies have established cooperation with Evergrande Group, and the purchase amount has reached more than one billion. These order cooperations that once made the leading paint companies extremely glorious are now exploding in terms of account payment and bill redemption.

Three Trees said that as of the end of March 2021, the company's overdue bills receivable totaled 53.6372 million yuan. Among them, China Evergrande’s overdue bills amounted to 51.370,600 yuan, and the repayment amount of 2,251,200 yuan as of May 31, 2021, China Evergrande’s overdue bills accounted for 95.77% of its total overdue bills.

Oriental Yuhong established a cooperation with Evergrande Group in 2017. After the incident between Evergrande and China Guangfa Bank broke out, the stock price fell for three consecutive days, with a cumulative decline of 8%. Investors analyzed that it is because the market is more concerned about the problem of Dongfang Yuhong's repayment and being dragged down by the tight capital chain of real estate companies, which will affect the growth rate of future performance.

Even though some coating companies said that they did not have any overdue payments with Evergrande, they still received strange eyes from their partners, worried that the coating companies would be dragged down and there would be financial problems, and they would not be able to pay other suppliers. From the "fat" in the eyes of the coatings industry to the "hot potato" that it has avoided, Evergrande Group's position can be described as falling from a high altitude. The companies that have already cooperated are worried that the payment will be difficult to recover and their performance will be affected, but more companies are worried that Evergrande will "survive with broken arms" at this moment, divesti Reduce the procurement of raw materials. But what everyone knows is that real estate companies represented by Evergrande are facing a crisis, which will undoubtedly bring a crisis to the upstream coating industry.